Not surprisingly sellers are very good at talking about their solutions, after all they know the features and benefits of their products and services off by heart. However, there can be a surprising difference between the seller’s view of the solution and that of the buyer. This can happen in at least 5 ways:
1. Can’t See The Alternatives
The buyer has a range of alternative solutions beyond that of the seller, including do nothing, do it in-house, adopt another technology, support a competing project, etc.
The salesperson has to consider the full solutions set available to the buyer and place his, or her solution’s advantages in that context.
Increasing the real competition faced by a salesperson is not another vendor, but another project, technology, or strategy. Being aware of these alternatives is important in order to prevent surprises.
2. Confusion About The Source of Value
The buyer and seller can have a different view of the features and benefits that are most important. For example, a market research company may promote the scientific nature of its research techniques as a key selling point, however for the buyer the ability to make decisions based on the information gathered is key. The buyer is likely to want to talk to business analysts and consultants ahead of statisticians.
When sellers list of features and benefits they should stop to ask the buyer how important these are and why. That will enable them to provide the buyer with more of what he, or she is prepared to pay for and less of the rest.
3. Key Success Factors Are Not Clear
The buyer in meeting his business needs knows that the seller’s product, or service is only one element of success. In particular, there is a people and a process dimension to the buyer’s overall solution.
For example, a financial services company purchases the latest back office solution, replete with new features and technologies. However, the impact of this technology is likely to depend less on how good it is and more on how well it is implemented, in particular how it fits with the people and processes within the organisation.
Managing a programme of change around the adoption of the solution, including training and support to users, process re-engineering, etc. will have a major bearing on the seller’s success. These factors can often be overlooked by technology vendors in particular.
The solution is not the product, or the system, it is a mix of product, people and process. So what are the people, product and process dimensions of your total solution?
4. The Total Project View
The seller’s solution is only one element of an overall programme, or investment by the buyer. For example, one of our clients was negotiating the sale of its financial services solution, valued at almost 8 million, as part of a larger 120 million project in the financial institution. Knowing where its solution fits in a complex project resulted in:
• The seller being able to offer lessons from similar large scale projects
• The potential to run certain phases of the project concurrently, eliminate areas of overlap and the potential to share resources (in respect of testing for example) across a number of phases of the project
• A full appreciation of business drivers, constraints and the dependencies for the project overall.
• An understanding of how other aspects of the project could impact on the success of the seller’s implementation
• The identification of a number of project partners (e.g. the consulting house) with whom relationships should be developed.
So, how does your solution fit into the entire budget, programme, or strategy of the buyer? How will it contribute to the success of all these other things.
5. Confusion About Scope
Lately we have been advising clients to include a new section in their prospoal documents. That is a section that clearly spells out how both parties will know when the project is complete. That is the scope of the project.
Solution scope is very important and sometimes overlooked. This is important where:
• The scope of the project has not been clearly defined, or defined properly.
• The buyer’s needs change during the course of the project resulting in scope creep.
• The demands of the project have expanded now that work has started and more information is not to hand.
Agreeing what is inside and outside of the scope is very important, so too is managing scope creep as the project progresses. That is because salespeople can be tempted to promise the world when looking to close a deal. Having said this it can turn out that buyers are sometimes more realistic than sellers. They don’t, for example, expect your product or service to do everything and they do expect that there will be some setbacks involved in most projects.
6. The Underlying Motivation
The first and most common mistake with respect to matching the buyer with a solution, is to fail to fully understand the buyer's needs.
Buyers only want solutions because they fix a problem, or meet a need. In this respect it is not how a solution works, which is where sellers focus most, but the benefits that matter most.
The salesperson may have the ideal solution and may be tempted to immediately present it to the buyer. However, that could seriously hinder the sale. If the seller races ahead of the buyer to sell his, or her solution, then he or she runs the risk of getting the solution wrong, in an of the 5 ways listed above.
Arriving at the Solution
These are important reasons why the speed at which the seller arrives at defining the solution is not an advantage.
Every day sales people are forced to make assumptions regarding what buyers want, this is particularly the case where buyers chose to keep sellers at arms length. When it comes to competitive bidding situations, sellers are forced to take the buyers requirements on face value. Both of these clearly have dangers.
The seller has to arrive at the solution in tandem with the buyer – that is based on a full and thorough exploration of needs and based on a joint process of reviewing alternatives.
Showing posts with label Sales Cycle. Show all posts
Showing posts with label Sales Cycle. Show all posts
November 04, 2009
Do you Understand your Buyers Complicating Factors?
There is a word we find ourselves using more and more in respect of managing sales cycles and that seems to keep coming up again in reviewing pipeline opportunities and accounts. That is COMPLICATING FACTORS.
When it comes to the complex sale, things are never straightforward. There are certain to be complicating factors. Understanding what exactly these are is essential to the seller’s role in successfully matching a solution to the complex needs of the buyer. If unaddressed these have the potential to scupper the sale.
The number of complicating factors involved in the typical sales is on the rise in response to the following trends in respect of today’s buying decisions:
Slower Buying Decisions– the longer a decision takes the more complex it is inevitably going to be. Against the backdrop of changing market conditions and business priorities, decisions can quickly be overtaken by events. It also means that the people involved in the decision can change during the process and this can have a major factor in derailing a potential sale. Try though as you may most sales people will struggle to accelerate the sale/buying cycle. A word of caution you run the risk of impeding the buyers buying process ever time you run ahead of them.
More People Are Involved – the more people that are involved the more complex the sale is likely to be, different stakeholders can have different, perhaps competing requirements and motivations. Getting a consensus can be a challenge as more people means more politics and it also means a greater risk of misunderstanding. Gaining access to and engaging in a meaningful way with all those now involved in making, or shaping the decision is a real challenge for the salesperson.
More sophisticated. Today’s important buying decisions are more carefully made than ever before. They are attributed by all the complexity of an important business strategy decision. That means more rigor, more information, more documentation, more oversight and so on. Buyer autonomy has been greatly restricted, with decisions being made at increasingly senior levels.
The issues of impact on the bottom line, cash flow and the balance sheet are key. More robust financial analysis is required, together with a more sophisticated investment appraisal. More feasibility type information is required, more external validation, and a robust business case. Issues of strategic fit, risk and implementation are at the top of the agenda. The discussions on these complex issues often takes place behind closed doors (a point we sales people sometimes forget).
More Risky. Today’s buying decisions are taking place in the context of greater market turbulence. In an environment of greater risk and uncertainty managers are tempted to play it safe and to delay, or postpone difficult decisions. With pressure on budgets projects are being stalled, shelved, or scrapped. Meanwhile organizational priorities have changed, with a focus on cutting costs, regaining competitiveness, managing cash and so on.
Spotting complicating factors in respect of the sale is vital to the success of the sale. Trying to close a sale when there are complicating factors that have not been resolved is not only foolish, but dangerous. It can call into question the sellers very commitment, or expertise.
This however can pose challenges for the salesperson, particularly in the context of the increasingly hands-off approach being adopted by buyers. This is certainly the case in respect of competitive tenders, for example.
The sales person must get close to the sale and more to the point the buyer if he, or she is to really understand and appreciate the full range of factors impacting on the buying decision. The seller must develop a deeper understanding of the buyer's business in order to understand his, or her impending business decision.
When it comes to the complex sale, things are never straightforward. There are certain to be complicating factors. Understanding what exactly these are is essential to the seller’s role in successfully matching a solution to the complex needs of the buyer. If unaddressed these have the potential to scupper the sale.
The number of complicating factors involved in the typical sales is on the rise in response to the following trends in respect of today’s buying decisions:
Slower Buying Decisions– the longer a decision takes the more complex it is inevitably going to be. Against the backdrop of changing market conditions and business priorities, decisions can quickly be overtaken by events. It also means that the people involved in the decision can change during the process and this can have a major factor in derailing a potential sale. Try though as you may most sales people will struggle to accelerate the sale/buying cycle. A word of caution you run the risk of impeding the buyers buying process ever time you run ahead of them.
More People Are Involved – the more people that are involved the more complex the sale is likely to be, different stakeholders can have different, perhaps competing requirements and motivations. Getting a consensus can be a challenge as more people means more politics and it also means a greater risk of misunderstanding. Gaining access to and engaging in a meaningful way with all those now involved in making, or shaping the decision is a real challenge for the salesperson.
More sophisticated. Today’s important buying decisions are more carefully made than ever before. They are attributed by all the complexity of an important business strategy decision. That means more rigor, more information, more documentation, more oversight and so on. Buyer autonomy has been greatly restricted, with decisions being made at increasingly senior levels.
The issues of impact on the bottom line, cash flow and the balance sheet are key. More robust financial analysis is required, together with a more sophisticated investment appraisal. More feasibility type information is required, more external validation, and a robust business case. Issues of strategic fit, risk and implementation are at the top of the agenda. The discussions on these complex issues often takes place behind closed doors (a point we sales people sometimes forget).
More Risky. Today’s buying decisions are taking place in the context of greater market turbulence. In an environment of greater risk and uncertainty managers are tempted to play it safe and to delay, or postpone difficult decisions. With pressure on budgets projects are being stalled, shelved, or scrapped. Meanwhile organizational priorities have changed, with a focus on cutting costs, regaining competitiveness, managing cash and so on.
Spotting complicating factors in respect of the sale is vital to the success of the sale. Trying to close a sale when there are complicating factors that have not been resolved is not only foolish, but dangerous. It can call into question the sellers very commitment, or expertise.
This however can pose challenges for the salesperson, particularly in the context of the increasingly hands-off approach being adopted by buyers. This is certainly the case in respect of competitive tenders, for example.
The sales person must get close to the sale and more to the point the buyer if he, or she is to really understand and appreciate the full range of factors impacting on the buying decision. The seller must develop a deeper understanding of the buyer's business in order to understand his, or her impending business decision.
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